The Federal Reserve System

The Federal Reserve (the Fed) System in the United States is a system of federal overseeing agencies, committees, and banks. The system was created in 1913, and its original purpose was for the Fed to be the lender of last resort for banks that needed financial assistance. This is still an important function of the Fed. For example, when financial markets crash or or our banks face bankruptcies, the Fed can intervene by making more than the usual amounts of funds available for banks. This allows for more borrowing and provides confidence to investors that the market dip will be short-lasting.

The Fed Board and the FOMC

The Federal Reserve Board of Governors is in charge of the United States Federal Reserve system. The board consists of seven “governors.” These governors, formerly chaired by¬† economists Alan Greenspan, Ben Bernanke, and Janet Yellen, and currently lead by Jerome Powell. are appointed by the United States President and approved by the Senate for a period of 14 years. For an up-to-date list of all Federal Reserve Board members, please click HERE.

As of December, 2023, the seven Federal Reserve Board members were:

Chair Jerome H. Powell Philip N. Jefferson Vice Chair for Supervision Michael S. Barr Governor Michelle W. Bowman
Governor Lisa D. Cook Adriana D. Kugler Governor Waller
Top Row f.l.t.r.: Fed Chair Jerome Powell, Vice Chair Phillip Jefferson, Vice Chair for Supervision Michael Barr, Michelle Bowman. Bottom Row: Lisa Cook, Adriana Kugler, and Christopher Waller.
Photo of Charles S. Hamlin

Photo of Andrew F. Brimmer

Charles Hamlin (left) was the first Federal Reserve Board Chair. He served on the Fed from 1914 until 1936 and was chair from 1914 until 1916. Andrew Brimmer (right) was the
first African American to serve on the Fed Board. He was a member from 1966 until 1974.


The Federal Open Market Committee (FOMC) is a twelve member committee in charge of monetary policy decisions in the United States . It consists of the seven board governors, as well as four rotating central bank presidents, plus the president of the central bank of New York. For more information about the FOMC, please click HERE.

Three committees advise the Federal Reserve Board: the Consumer Advisory Council, the Federal Advisory Council, and the Thrift Institutions Advisory Council. For information about these advisory committees, please click HERE.

The Federal Reserve Board, in conjunction with the Federal Open Market Committee, is tasked to act independently from Congress and the White House. The chairperson testifies before Congress, but decisions do not have to be approved by politicians. The Fed is semi-private because it is owned by its member banks who receive fixed dividends (6%) from stock in the Federal Reserve central banks.

To learn more about the Federal Reserve System, you can visit the Federal Reserve System website at .

The United States Central Banks

The United States banking system includes 12 Federal Reserve central banks and 24 branch banks. For a listing and map of these federal banks, please click HERE. The Federal Reserve oversees thousands of commercial banks, savings banks, and other financial institution in the United States.

Economists at the central banks are responsible for providing reserves to member banks, supervising member banks, clearing checks and gathering statistics, and doing research to help governments and businesses in their economic decision-making.

Central Banks Abroad

Next to the central banking system of the United States, the central bank of China (the People’s Bank of China), the Bank of Japan (Nichigin), and the European Central Bank (ECB) are some of the most powerful government banks in the world.

The bank of Japan has been around since 1885 and is in charge of issuing new currency in Japan. The functions of the BOJ are similar to that of the Federal Reserve System in the United States.

The People’s Bank of China is in charge of issuing currency and supervising private banks in China. The People’s bank is controlled by China’s ruling Communist Party.

The initial formation of the European Union led to 12 European countries agreeing on a single, common monetary policy, as well as a single currency (the euro) for these countries. Currently, 19 Euro Zone countries with a total population of approximately 350 million, use the euro. The euro is currently the second most used currency behind the U.S. dollar. In charge of the monetary policy for these countries, the European Central Bank, serves a role similar to that of the Federal Reserve in the United States. For a website link and more information about the ECB, please click HERE.